PROCEEDINGS OF THE WORKSHOP OF POWER SECTOR REFORM: PROCESS AND
IMPLEMENTATION EXPERIENCES IN SUB-SAHARAN AFRICA, ACCRA, GHANA

By

Stephen
Karekezi and Donella Mutiso

Abstract

Power sector institutions in Africa are characterized by inability to
provide adequate levels of electricity services to the majority of the region's
population especially to the ruralpoor.In Uganda,Tanzania and
Kenya, only about 6.6%, 7% and 11% respectively of the total population has
access to electricity.In the
Democratic Republic of Congo (formerly Zaire), only 5% of the population
benefits from electricity supply.Provision
of electricity is largely confined to the privileged urban middle and upper
income groups.For instance, in
Botswana 20% of the urban population and 3% of the rural areas have access to
electricity.Most African utilities
routinely record unsatisfactory technical and financial performance which
compares poorly with their counterparts in other developing countries in Latin
America and South East Asia.Poor
technical and financial performance is a common characteristic in almost all
African utilities irrespective of the management team that is in charge.This could be an indication of institutional deficiencies rather than
only the more conventional problems of inadequate technical expertise and poor
management.

While Africa's energy sector has performed well below the standards of
other less developed continents such as Asia and Latin America, the continent
posses enormous untapped energy potential.For instance, Africa has substantial hydropower potential but less than
4% has been harnessed.Africa has
an estimated proven geothermal potential of 9,000 MW and only approximately 45
MW has been exploited.Africa has a
great deal of untapped energy which if adequately tapped or exploited could help
meet the growing energy demand as well as improve Africa's economic growth rate.

Traditionally, public power utilities in Africa are monopolies.There is a debate about how far this can account for the undeniable
under-performance in the delivery of energy services, compounded by the
substantial financial losses notched up by public power utilities.It also appears that the highly centralized electricity industry
constitutes an important barrier to the growth of more successful,
cost-effective and sustainable decentralized power sector institutions.

The structural nature of the problems facing the power sector in Africa
is now a priority issue for Governments, bilateral donor agencies and
multilateral development banks and efforts to either implement or contemplate
fundamental and far-reaching reforms of the power sector are now underway in
most SSA countries through the now ubiquitous Structural Adjustment Programs (SAPs).The process of structural adjustment involves, among others, economic
liberalization that calls for freeing the market from state control and
divestiture of public ownership in areas where the private sector is said to
have a comparative advantage.This
is expected to lead to restructuring and privatization of the power sector which
will require substantial inflows of private capital, professional and skilled
manpower as well as technology (a prerequisite for the success of this process).The private sector is expected to mobilize those resources from domestic
and foreign sources.On the
other hand, some opponents of restructuring and privatization, argue that this
could have negative implications for low income groups and rural communities and
on strategic and national security issues of the power sector.Some analysts question whether some of these reform processes that have
been implemented in countries with big power systems (with capacities ranging
between 10,000 to 50,000 MW) are suitable for African countries, most of which
have relatively small systems.Whether
African countries can handle the regulation and co-ordination that comes with
these systems is still another questionable issue.

The main objective of this Workshop was to bring together representatives
(energy policy-makers and researchers/analysts) from countries which have
implemented some power sector reforms in Africa and those considering initiating
the process of reform, to share their experiences and see how Africa can
optimally utilize its immense power resources and how the sector can operate
more efficiently.The Conference
brought together participants from Uganda, Kenya, Cote d’Ivoire, Ghana,
Burkina Faso, Denmark, Zimbabwe and Mauritius.A large number of utility representatives attended the meeting.Utilities represented in the meeting included the following:-

-Electricity
Corporation of Ghana (ECG) - the second largest utility in Ghana that is in
charge of distribution in the central and southern regions of Ghana

- Northern
Electrification Department (NED) - a subsidiary of VRA, that is in charge of
electrification in Northern Ghana

- Volta River
Authority (VRA), Ghana - the country’s largest utility

- Ghana National
Petroleum Corporation (GNPC) - Ghana’s main petroleum parastatal that is to
implement a major gas-fired IPP at Tano (coordinators of this project attended
the meeting)

- Uganda
Electricity Board (UEB)

-Zimbabwe
Electricity Supply Authority (ZESA)

The
Cote d’Ivoire and Ghana country case studies offered various lessons to be
learnt by other countries, since they have already implemented far-reaching
reforms in their power sectors.The two-day workshop also identified more workable, efficient and
sustainable power sector structures for the different African countries.

This paper is available on an exchange basis. If you find
it to be useful,
we encourage you to send us any relevant publications from your
organization. To request for the full paper, please fill in the
publications request form